Real Estate Investor Magazine South Africa October 2015 | Page 30

STRATEGIES

Risk Management

in Buy-To-Let
How to manage interest rate risks
BY GERT VAN STADEN

I

n July this year, the SARB Monetary Policy
Committee (MPC) increased the repo rate, raising
the prime lending rate for consumers by 0.25%
from 9.25% to 9.50%. This was the first rate hike
since July 2014, when the last 0.25% rate hike was
announced. While this very gradual rise in interest rates
is unlikely to impact buy-to-let investors substantially
while interest rates remain at historically low levels, it is
a red flag that interest rates are moving up.
Interest rate cycles
The interest rate moves up and down in